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2021 Dapp Industry Report

Yearly Industry Report Cover 2021

The highlight of 2021, the DappRadar Industry Report. All the data, yearly trends, and surprising insights, to celebrate an amazing year for the dapp industry.

2021 was perhaps the most critical year for the industry so far. After a 2020 that can be defined as a year of building and preparation, this year saw enormous progress and positive results across the industry’s most important metrics and macro indicators. The number of wallets interacting with dapps, and the trading volumes are higher than ever, while the demand for NFTs and games increased considerably. The industry’s three main categories – Games, NFTs, and DeFi all experienced positive trends and appear to be in an excellent place to continue gaining momentum and consolidate going forward.

The NFT space experienced one of the most impressive expansions overall, amassing over $23 billion in trades in this year. The proof of ownership entitled to their holders and the integration of intelligent computational processes disrupted the way we treat digital art and collectibles. Collections like CryptoPunks, Bored Ape Yacht Club (BAYC), and Art Blocks became the face of the NFT explosion. Hollywood, sports celebrities, and big brands like Coca-Cola, Gucci, Nike, and Adidas, made their dent in the space, providing NFTs with a different level of exclusivity. The power of attraction of these famous names has profoundly impacted NFTs and the blockchain industry overall. Moreover, NFTs arrived at famous traditional art auction houses like Christie’s and Sotheby’s, opening a doorway to a mainstream audience that would otherwise not be that familiar with the term. NFT being named word of the year says it all. 

With all of these elements in play, and hundreds of exciting projects launching by the day, the demand for NFTs spiked to unprecedented levels. Marketplaces like OpenSea, Atomic Market, and Solanart became some of the most popular dapps. The value of these assets rose significantly, and the floor market cap for the top 100 collections is now estimated at $16.7 billion. The pieces from specific collections are viewed as value storage units and sparked another exciting trend: fractionalization of NFTs. 

Not only NFTs but blockchain-based games also enjoyed an outstanding year. The play-to-earn revolution, spearheaded by Axie Infinity, helped the game category attract a current average of  1.4 million daily UAW, accounting for almost half of the industry’s usage. Most importantly, the social impact generated by this trend, especially in emerging economies like the Philippines or Venezuela, helped lure the attention of influential Venture Capitals (VCs) that poured a noticeable $4 billion worth of investments into the category. The capital acquired will help the teams develop further. The surge of scaling solutions like Immutable X or Polygon put the game category in a privileged position for years to come.

Boosted by the narrative around the metaverse, blockchain-based virtual worlds, and all metaverse-related projects experienced a considerable value appraisal. The value of lands within these virtual worlds skyrocketed, appreciating as much as 500% and being sold as high as $2.5 million. The tokens supporting this narrative were amongst the best performing cryptocurrencies, signaling the potential of this virtual space. 

After 2020 saw billions flowing into the DeFi, the category showed an evolved and more mature space. While Ethereum still dominates DeFi, the well-known issues of high transaction costs and low scalability allowed other blockchains to make their DeFi footprint visible. DeFi also saw a significant trend, where influential DeFi protocols expanded their features to more than one chain in the so-called multichain paradigm. Dapps like Aave, Curve, and SushiSwap started a movement that is now common to see and helped networks like Polygon to make an impact on their own. 

Meanwhile, blockchains like BSC, Solana, Avalanche, and Terra consolidated themselves as DeFi powerhouses by becoming alternatives to Ethereum, addressing the issues mentioned above. PancakeSwap, BSC’s crown jewel, propelled the Binance-branded network past Ethereum in terms of usage in mid-February and has become the most used dapp considering on-chain data. In the second half of the year, Solana and Avalanche make their presence felt with attractive DeFi suites and a smooth User Experience (UX) thanks to their native wallets and dapps. The narrative around a specific blockchain labeled as an Ethereum killer is fading away. Each blockchain offers advantages compared to others making a complete ecosystem overall. 

Without question, the top blockchain categories enjoyed their best year so far. Nonetheless, the industry still faces significant challenges that need to be acknowledged and addressed. Security issues presented one of the most critical obstacles, as $1.9 billion were stolen in hacks, exploits, or simply bad practices. As the adoption of cryptocurrencies and other blockchain use cases moves forward, regulations are expected to become the next big topic to tackle. Finally, there are more blockchain users than ever before. Several platforms experienced issues as their respective infrastructures could not handle the rising demand. With mass adoption one step closer, the leading dapps should brace themselves to welcome millions of users in the upcoming months. 

Key takeaways

  • 2021 saw the blockchain industry expand across different verticals; the number of daily Unique active wallets connected to dapps increased 7 times, reaching an all-time high of 2.7 million at the end of 2021.
  • The NFT market experienced its best year yet, generating over $23 billion in trading volume, while the floor market cap for the Top 100 NFT collections were at $16.7 billion.
  • Amidst the news of Facebook rebranding to Meta, the metaverse narrative got mainstream; blockchain virtual worlds generated over $500 million trading volume and reached an all-time high market cap of $3.6 billion.
  • Spearheaded by Axie Infinity, the play-to-earn revolution reached new heights; 49% of the industry’s unique active wallets (1.4 million) connected to blockchain games propelling the games’ NFT trading volume to $4.5 billion in 2021.
  • The DeFi space welcomed new competitors for Ethereum, such as Solana, Avalanche, and Terra; the industry’s TVL increased 7 times year-over-year surpassing $200 billion, with almost 60% still concentrated on Ethereum.
  • The blockchain industry took a huge step towards mass adoption; recognized VCs, brands, and celebrities joined the space resulting in more than $27 billion of funds attracted to the cryptocurrency and blockchain companies.

Table of Contents

2.7 million UAW per day use dapps

The dapp industry showed significant signs of organic growth in 2021. At the time of writing, over 2.7 million Unique Active Wallets (UAW) connect daily to a blockchain dapp hosted in any of the 30+ blockchain protocols tracked by DappRadar. Compared to 2020, the number of UAW interacting with dapps increased 592%. The growth was constant and sustained.

The first crucial upward trend was observed in April, where daily UAW jumped 67%, from 630,000 to more than 1 million. Two blockchains were the main drivers behind the surge in usage. Binance Smart Chain (BSC) thrust by PancakeSwap arose as a solid alternative to the high transaction fees experienced in Ethereum. At the same time, Wax’s Alien Worlds put play-to-earn dapps on the radar. These two dapps gained traction early and have not looked back since. Both are still among the most used dapps in the entire industry. 

The usage in the industry continued to ascend, yet, in May, hours after the controversial tweets of Elon Musk blasting Bitcoin due to environmental concerns, the crypto market suffered an important crash. The essential cryptocurrencies, including bitcoin and ethereum, dropped 33%, and the usage in the industry was hindered as a result. Liquidation events happened across all DeFi dapps, with the most significant one occurring in BSC’s Venus. Nonetheless, after almost two months of stagnant growth, the play-to-earn and GameFi trends began their scale in late July, supporting the industry’s development ever since. 

Thanks to play-to-earn dapps like Splinterlands, and GameFi options like CryptoBlades, blockchain games began to attract more users than their peer categories. For the first seven months of 2021, DeFi was the category where most UAW was connected. However, in late July, we see the trend previously mentioned. The game category began to dominate usage, accounting for almost half of the industry’s activity. 

UAW Category DeFi Games 2021

For the first half of 2021 (H1), DeFi was responsible for up to 57% of the industry’s activity, while NFTs and games accounted for 32% together. In August, the game category’s dominance began to show as 49% of the industry was connected via games. At the time of writing, games represent 51% of the industry’s usage, while DeFi accounts for 37%.

The industry grew an outstanding 765% year-over-year (YoY) and showed adoption across the most critical categories. Moreover, the expansion into new geographies like the Indian market with Bollywood announcements, and play-to-earn across the globe are both encouraging signs of expansion. 

As the world becomes more digital, it is imperative that U|X is enhanced and the friction with blockchain products is reduced for users to be onboarded smoothly. A good example can be observed in the Philippines, where Ronin’s mobile wallet has the opportunity to onboard users in a country where 25% of its population is still unbanked. All in all, quite positive signs in terms of usage and a precious opportunity to reach mass adoption in upcoming months.

Competition in the industry heats up

At the time of writing, DappRadar currently tracks 30+ blockchains, a notable growth when compared to the 16 networks tracked at the same point last year. Another proof of the expansion experienced in the industry. Last year, Ethereum’s dominance was strongly felt across different verticals, especially in DeFi and NFTs. Nonetheless, due to the well-known transaction speed and cost issues, other blockchains started attracting users with their respective offerings. 

Layer-1 and layer-2 solutions as well as sidechains became hosts of interesting DeFi and play-to-earn dapps. Layer-1 networks including BSC, Solana, Terra, Avalanche, Hive, and Wax found their way to offer robust alternatives to the one presented by Ethereum. Meanwhile, layer-2 solutions like Polygon, Arbitrum, and Immutable X contrast the high transaction fees while still connected to Ethereum and its underlying security infrastructure. Plus, the Ronin sidechain has grown beyond Axie and will become a relevant player in onboarding the masses in emerging economies. 

While some of these blockchain alternatives like Terra and Arbitrum with DeFi, or Hive, Wax, and Immutable with games, are focused solely on one category, most of these networks have become complete ecosystems sustaining a holistic offering. The narrative around a specific blockchain labeled as the Ethereum killer has calmed. The competition is more open than ever and that should be considered a healthy trend for the industry in general. 

2021: year of the NFTs

2021 will be remembered as the year that introduced NFTs to the masses. Despite being conceived in 2014, NFTs didn’t begin to leave a visible footprint until this year. In 2021, the NFT space generated over $23 billion in trading volume. Significant trends such as randomly generated collectibles, the involvement of mainstream celebrities in the space, or the rise of play-to-earn, were the main drivers behind a record year for NFTs. The latest metaverse boom was the cherry on the cake. 

In February, Dapper Labs’ NBA Top Shot generated $226 million in trades, accounting for 46% of the record NFT trading volume. Although the next wave of Ethereum NFT collectibles caused the robust metrics, it is essential to highlight that Flow’s collection was a critical NFT catalyst for the rest of the year and a sign of things to come. At the time of writing, NBA Top Shot is the fifth most traded collection ever with over $747 million in trades. 

During the first six months of 2021, the NFT space generated a record $2.5 billion in trades, smashing the figures previously seen in the space. However, everything changed in Q3. After months of seeing projects with a strong community, teams, and utility factors consolidate to blue-chip status, the NFT market exploded with $10.7 billion in trades during the period. Projects like Art Blocks, CyberKongz, Loot, and Cool Cats, created an enticing market. 

The value of NFT collectibles appraised significantly in 2021. The collections are not simple NFT projects anymore. Some have become exclusive brands that will become more relevant when the metaverse becomes more mature. Considering the top 100 NFT collections by historical trading volume, we estimate an NFT market cap of $16.7 billion at the time of writing.

Next, we dissect the aforementioned trends that helped the NFT market consolidate to its current form.

Randomly generative projects

In January, a project called Hashmasks was available to mint without really knowing what the owners were getting. This served as a blueprint for almost all the NFT projects launched after. Randomly generated NFTs presented a truly innovative form of expression that positively impacted the art and NFT collectibles sector overall. Leaning on Machine Learning algorithms, the NFTs metadata is generated automatically based on a series of predefined attributes and distributed randomly. At the time of minting, users do not know what exactly they have bought, turning NFTs into a sort of lottery ticket depending on the rarity of each piece. Even though all the elements of a collection have been generated already, they are being distributed and the metadata is revealed in sequence at a specific moment after the sale has been completed.

Celebrities and brands go NFT

The entrance of celebrities like SouljaBoy, Steve Aoki, and Rob Gronkowski into the NFT space early in the year paved the way for the category’s most crucial period so far. In months to come, mainstream media was filled with NFT headlines after Paris Hilton, Eminem, and Stephen Curry joined the space. This trend became more evident when NFTs debuted at Christie’s famous auction house when Beeple’s 1/1 art piece “Everydays: the First 5000 Days” was sold for $69 million. Other 1/1 art NFTs and pieces from the CryptoPunks and BAYC collections were auctioned in Christie’s and Sotheby’s for millionaire amounts in the upcoming months.

Steve Aoki
snoop dogg

In the narrative for mass adoption, celebrities and brands have a strong voice. The involvement of these names in the NFT space is a strong indicator at a macro level for the category. Fashion giants Gucci, D&G, and Burberry make their appearance in the space after launching their respective collections. Coca-Cola partnered with Decentraland to establish unique wearables, while Pepsi launched its first 1,893 NFT pieces. And VISA publicly announced on August 23 the purchase of CryptoPunk #7610, solidifying the collection’s status and embracing the case for NFTs. 

Arguably one of the boldest moves of the year took place in the second week of December when Nike announced the acquisition of RTFKT Studios. This blockchain native fashion house had been making a name with digital fashion for the metaverse, collaborations with artists, and selling physical merchandise exclusive to NFT owners. The acquisition positions a colossal brand like Nike immediately in the middle of crypto culture.

Added utility paradigm

In May, Larva Labs started another important trend for the NFT space – the utility paradigm that saw CryptoPunk owners qualify for the Meebits airdrop. This led to a significant value appraisal in Larva Labs collections and consolidated the team as one of the most critical players in the NFT space.

Furthermore, the cultural and historical value presupposed by CryptoPunks converted these pixelated NFTs into actual units of value store. Especially after VISA’s purchase. The average sale price of CryptoPunks grew 4,580% in 2021 and is currently sold on average for $365,000. CryptoPunks is the second most traded collection ever, with more than $2.28 billion generated in trades at the time of writing. The collection’s floor price has risen to 73 ETH ($321.500), and Punks have been sold as high as $10 million.

NFT projects becoming community-driven brands

BAYC might be the most critical NFT avatar project besides CryptoPunks. The collection created by Yuga Labs launched on April 30 and started a strong movement on social media platforms. Bored Apes began to be used as avatars on Twitter, and the sense of community within the space felt revamped. The boost provided by celebrities like Alex Ohanian, Steph Curry, and Von Miller joining the project, coupled with a robust utility and a complete roadmap, helped BAYC become another collection that rose to the status of actual units of value store. At the time of writing, the collection’s floor price is 50 ETH or $2 million. 

Yuga Labs and its BAYC is one example of a team that has established itself as a brand. Owners are proud to be a part of and have a strong presence in the metaverse. The utilities, in some cases, transcend to the physical life where members wear their merchandise in the streets. Teams like Yuga Labs, Larva Labs, or RTFKT have become more than simple groups. The recent partnerships between BAYC and Animoca Brands, or the one between RTFKT and Nike strengthen this narrative. These partnerships have established themselves as trustworthy brands that represent the ideals of Web 3.0. 

NFT Games

Finally, the important intersection between NFTs and play-to-earn. The presence of game items and virtual parcels of lands portrayed as NFTs were a key ingredient to the record trading volumes. As the adoption of blockchain games and the metaverse progresses, the mark of game NFTs will become more evident in the space. In the impressive Q3, NFTs amassed over $10.7 billion in sales, with game NFTs contributing 22% to the total. This is just the latest example of the vast flexibility offered by NFTs.

The profound impact created by play-to-earn

2021 was not only the year of NFTs. Blockchain-based games were widely adopted en route to represent almost half of the current industry’s usage. Different blockchains arose as alternatives capable enough of hosting fully operational games. Ecosystems across the industry achieved to remove the burdens of high transaction fees without hampering the speed. Networks like Wax, Ronin, BSC, Immutable, and Hive became home to many play-to-earn and GameFi options. 

Blockchain games are not something new. Still, the ability to monetize the playing time attracted a record audience in 2021. This scenario was augmented by mainstream media covering the social impact that play-to-earn created in emerging economies. In the same manner, the high activity registered lured the attention of VCs that invested record capital in 2021. But the current estate of the blockchain game sector had an important catalyzer. 

The rise of Axie Infinity

No dapp created a more profound impact in the industry than Axie Infinity. Developed by Vietnamese studio Sky Mavis, Axie Infinity is a play-to-earn dapp where NFTs in the form of Axie monster pets are used to play in-game battles, breed new Axie’s, or collect game items that serve different purposes. The game has a complete integrated tokenomics framework that allows gamers to earn (passive) income in the form of AXS and SLP tokens.

This play-to-earn element significantly impacts emerging economies such as The Philippines. The positive impact generated in our society, coupled with the migration to the Ronin sidechain, caused a massive uprise in the dapp’s usage and value. 

To put things into perspective, Axie had around 20,000 Daily Active Users (DAU) in March. This is understood as off-chain data where a wallet does not necessarily need to be connected to play the game. At the time of writing, it has surpassed 2.5 million. That represents a 12,400% increase of its user base in 9 months. 

Moreover, the dapp’s on-chain activity also shows signs of substantial growth. In Q4, around 105,000 UAW are connecting daily to the game. 59% higher than Q3 and 1,422% up from the numbers recorded in Q2.

In addition, Axie NFTs became the most traded NFT collection ever with almost $4 billion in historical trading volume. In Q3, Axie accounted for 19.5% ($2.08 billion) of the record $10.6 billion NFT trading volume in the same period. The rise of Axie is simply mesmerizing.

Tokenomics critical to play-to-earn success

Without question, Axie has been an essential contributor to the game space. But play-to-earn and GameFi dapps in other networks also made a noticeable impact. Like Axie, these games have an attractive tokenomics design that incentivizes the passive income factor. 

Splinterlands, a trading card play-to-earn game hosted on the Hive network, became the most played game based on on-chain activity with over 350,000 daily UAW. The team behind Splinterlands launched the SPS token in late July, boosting the game’s activity ever since. SPS acts as the game’s governance token and can be obtained by gaining battles. 

Since releasing SPS, the player base skyrocketed 1,406%, while the number of transactions jumped 448%, reaching 1.65 million transactions in Q3.  Although the game’s growth is related to the token, the team behind the game has done a tremendous job of continuous improvement and development to avoid falling into repetition.

Alien Worlds is another blockchain-based game that has benefitted from its native token. The space mining and exploration GameFi dapp have been amongst the most played blockchain games in 2021. Hosted mainly on Wax, the game quickly attracted thousands of users by offering Trilium (TLM) as a mining reward. With over 235,000 daily UAW, the GameFi dapp has grown its user base by 2,594% since Q1. 

These games were an important reason that games overtook DeFi as the most-used category in the industry. It is no coincidence that both projects have a solid tokenomics design. The tokenomics of a game is one of the most critical factors in the play-to-earn space. A scenario demonstrated by Alien Worlds and Splinterlands. But also present in BSC with mixed results.

The case of BSC

Starting with a solid DeFi offering, BSC slowly became the house of GameFi in 2021. At the end of July, after Alien Worlds and Axie Infinity were consolidated as the top game options, BSC became a popular alternative for the movement. 

The first BSC game to put up high usage numbers in the Binance-branded network was CryptoBlades, a battle game where users gained SKILL, the in-game currency to then be staked. 

In August, CryptoBlades became the most played game measured only by UAW. On August 6, it reached its peak with 406,000 UAW connected to the game dapp, yet, after that point, everything went downwards, and the game crashed 95% during September in terms of usage. The negative downtrend experienced was closely related to the price of SKILL, which lost 95% of its value abruptly, leading to a negative reputation. 

Similar scenarios unfolded in other BSC games. Most recently, CryptoMines, which was forced to shut down after the price of ELEMENT, the game’s native currency, collapsed 99% in three days. 

While BSC games might be losing credibility, there is one that stands out from the rest: Mobox. Mobox is a game dapp with heavy DeFi features embedded into its game’s mechanics, which also combines NFTs as playable characters. It is a true representative of the GameFi movement. Mobox has managed to retain its user base and is currently the fifth most played game in the industry attracting over 24,000 daily UAW on average. It remains to be seen whether other BSC GameFi options can retain their player base in the same manner that Mobox does. 

VCs rake $4 billion in blockchain games and infrastructure

The latest bloom of play-to-earn games lured the attention of essential investment entities. After investing only $80 million in 2020, VCs have invested a record $4 billion in blockchain games in 2021. The capital invested in blockchain games and its underlying infrastructure in 2021 is 5,000% higher than the previous year.

The trend started with a strong act. After the impressive performance of NBA Top Shot early in the year, a group of angel investors including Will Smith, Michael Jordan, Stefon Diggs, among several others, led a $350 million investment in Dapper Labs, the team behind the NBA collection, and CryptoKitties, the popular NFT breeding game. 

The second half of the year was even more valuable in the capital invested. In September, Sorare, the French startup behind the fantasy football (soccer) play-to-earn game, received $680 million in funding led by Softbank and football stars Gerard Piqué, Rio Ferdinand, and Antoine Griezmann. The same month, layer-2 network Immutable X received a $77 million funding round, while Dapper Labs raised an additional $250 million investment. 

Additional investments that occurred after include a $161 million funding round to Sky Mavis, a $65 million investment in Animoca Brands, a $93 million financing to The Sandbox, and an impressive $750 million investment in Forte, a platform that enables layer-1 and layer-2 solutions that intends to sustain the development of blockchain-based games. 

The record capital invested in the space is just another signal of its positive outlook. Not only will these groups have more economic power to continue developing, but the individuals behind some of those investments will provide these teams with an invaluable resource of knowledge.

2022 will be even bigger

After a strong 2021, the future of play-to-earn looks even brighter. The significant amount of capital raised certainly provides teams with ammunition to continue developing and enhancing their current products. But perhaps more importantly, the masses are starting to realize the power of NFTs and play-to-earn games. 

In 2022, existing games will enable additional play mechanics. Such is the case of Lunacia, Axie Infinity’s virtual land, which will unlock additional playing mechanics and provide landowners with additional benefits within the leading game dapp. The Sandbox, one of the most important virtual worlds, is currently in its Alpha phase, and it’s expected to continue moving forward in 2022. At the same time, Splinterlands may also involve virtual land at some point next year. 

In addition to the established game dapps, hyped projects are closing their development phases. Illuvium, an open-world RPG play-to-earn dapp is expected to enable gameplay at some point in 2022. This game is labeled a AAA game and will run on Immutable X. Other Immutable games worth monitoring include the trading card game Gods Unchained, the mobile dungeon crawler Guild of Guardians, and the action MMO Ember Sword. 

Upcoming play-to-earn games (Ember Sword, Illuvium, Mirandus, and Aurory)

Solana is another network that will host enticing games within the following year. Star Atlas, a AAA play-to-earn open-world space exploration strategy MMORPG that relies on the Unreal Engine 5 developed by Epic Games, is one of the most expected games. The play-to-earn dapp will involve a complete economy backed up by well-designed tokenomics and has already received millions in investments led by Animoca Brands. Although the entire gameplay will not be available next year, mini-games and virtual world exploration will launch in 2022.

Other Solana games worth knowing include Aurory, another play-to-earn RPG featuring PVE and PVP monster battles, and integrated tokenomics. Cryowar, another game that will rely on the Unreal Engine, and aims to become a real-time multiplayer PVP arena NFT game. Project Seed, an action RPG play-to-earn battle game that involves an interesting tokenomics framework that will become the foundation of the future game’s DAO. And finally, Ninja Game, another ARPG, that will provoke nostalgia for people who grew up playing Diablo.

Another network that should be monitored closely is the one governed by Gala Games. The startup led by Zynga’s co-founder Eric Schiermeyer focuses on building truly decentralized blockchain games. Gala community members can own nodes, which will ultimately become their decentralized network. So far, the startup has only launched Town Star, a play-to-earn farming game that rewards players with GALA, the network’s native utility token, and TOWN, the game’s token. In addition, Gala will launch Mirandus, a fantasy RPG that will take place in a massive digital world and is one of the most anticipated games of 2022. Gala will also host the battle arena game Spider Tanks, the space adventure Echoes of Empire, the tower defense game Fortified, and the recently announced The Walking Dead play-to-earn game. 

Metaverse related assets soar to unprecedented value 

Strongly tied to the success of NFTs and blockchain games, the outlook for the metaverse and virtual worlds was already promising. Nonetheless, after Facebook’s rebranding announcement, the metaverse outlook exploded positively.

The NFTs and cryptocurrencies related to metaverse projects experience a serious value appraisal, while the demand for this type of dapps surged in recent weeks. For instance, in Q4, virtual world dapps have generated north of $330 million in NFT trading volume involving more than 50,000 unique traders. The trading volume is 155% higher than the previous three quarters combined, while the number of unique traders doubled. 

Without a doubt, virtual land NFTs are one of the most enticing aspects of the blockchain-based metaverse. These NFTs allow owners to build experiences, incentivizing creativity and imagination while embracing decentralization. They also unlock a monetization aspect since these virtual parcels can be rented to third parties or simply serve as a rentable investment. 

Land appraisal

Since the Meta announcement, the value of virtual parcels shot through the roof. The price on average for virtual lands in The Sandbox, one of the essential metaverse players, surged almost 500% from the end of October. In November, virtual lands on The Sandbox were traded for $14,800 on average, a significant growth from October’s $2,500 average. 

Similar scenarios were observed in other blockchain virtual worlds. Decentraland, a blockchain virtual world running since 2017, also appraised the value of its parcels. Virtual lands in this platform gained 116% in value and were traded for $25,000 on average in November. At the same time, CryptoVoxels digital lands were sold for a price 25% higher than the one registered in October. 

Furthermore, the two highest land NFT sales in 2021 occurred in November. The Fashion Street Estate in Decentraland was sold for 618,000 MANA or $2.42 million, while an Axie Infinity Genesis Plot was sold for 550 ETH or $2.33 million.

Finally, the value that virtual lands represent to the entire NFT market increased significantly. In October, the floor market cap of the top 100 NFT projects was estimated at $16.8 billion, with only 8% constituted by virtual lands. One month later, the market cap for virtual real estate ascended to $4 billion and now represents at least 25% of the NFT floor market cap figure. 

Metaverse tokens exploded

Like virtual real estate, cryptocurrencies backing metaverse-related projects, including several play-to-earn dapps, saw their value soar in the last weeks. Despite the latest dip in the cryptocurrencies market, metaverse tokens, including those backing up blockchain games, are still overperforming most of their peers.  

GALA, the native token of the Gala Games ecosystem, has been one of the best-performing assets in the blockchain industry and any other industry on the globe. In this year, GALA has appraised 31,500%, easily outperforming any type of asset. AXS, Axie Infinity’s governance token, has also performed exemplary, supporting the massive year of its host dapp. In 2021, AXS has appraised over 20,800% despite the latest market dip.

Assets backing up virtual worlds were amongst the most profitable assets as well. SAND, The Sandbox’s utility and governance token reached an all-time high of $8.40 and has increased its price by 14,000% since the start of the year. The price of CUBE, Somnium Space’s native utility token, surged 4,700%, whereas the price of MANA, Decentraland’s native and governance token, has risen 4,600% in the same timeframe.

The metaverse looks to become the parallel reality where we socialize, trade, play, and even work. This space will transform our current lifestyle as it can create a whole new economy to meet the virtual society’s developing digital needs and preferences. As complete as the metaverse looks, it still has room to grow. The recently launched WorldWide Webb has already laid the foundations for an interoperable virtual world. A space where avatar NFTs from different projects can access the game’s functionalities. All in all, the metaverse, along with play-to-earn, will continue to dominate the narrative around our ever-evolving industry.

$189 billion in assets locked across all DeFi protocols

Often overlooked by the impressive expansion of the NFT and game categories, the performance of DeFi in 2021 was very positive too. After 2020, DeFi became the most critical category, showing increased growth. At the time of writing, the industry’s TVL is measured at $189 billion, a 767% increase from the previous year. 

Two crucial trends were observed in the DeFi space in 2021. First, hindered by Ethereum infrastructural challenges, several DeFi dapps like Aave, Sushiswap, and Curve extended their services into multiple networks simultaneously in the so-called multichain paradigm. This trend paved the way for other blockchains to gain ground within the space.  Ethereum’s TVL grew a solid 455% year-over-year (YoY) and currently sits at $115.2 billion. Nonetheless, despite the network still dominating the DeFi scene (around 61% of the industry’s TVL), relevant blockchains took advantage of Ethereum’s limitations.

BSC quickly positioned itself as a DeFi alternative attracting millions of users, mostly in part due to PancakeSwap friendly’s interface. PancakeSwap, the most used dapp in the industry based on on-chain data, became key in helping BSC position itself as the second blockchain in terms of TVL ($21.9 billion at the time of writing). Even though BSC DeFi dapps like Venus suffered serious liquidations in May after the crypto market collapsed, BSC has regained some usage and value lost after the adverse events. Dapps such as lending protocol Alpaca Finance, and a series of dapps that followed PancakeSwap’s recipe for success, helped BSC establish itself in a strong position behind Ethereum.

After losing the crown as the most-used category, the DeFi space slowly recovered in Q3. High usage activity from Solana and Avalanche boosted the DeFi usage overall. In Q3, more than 655,000 UAW connected to daily DeFi dapps on average, representing 39% of the industry’s use. In Q4, the usage has increased 47% and now represents 44% of the industry’s activity still dominated by games. 

Precisely, Solana was one of the most improved blockchains in terms of TVL. In 2021, DeFi dapps like AMM Raydium, DEX Serum, Sunny, Saber, Orca, and Solend were launched, giving Solana one of the most diversified DeFi suites in the space. Coupled with functional and friendly wallets, Solana exceeded expectations. In October, Solana surpassed $10 billion in TVL and has presented a serious challenge to BSC’s second spot. At the time of writing, Solana is the fourth blockchain in terms of TVL with $11.3 billion.

After six months of holding around $200 million in TVL, the metric in the Avalanche network exploded to its current value of $10.9 billion. Mostly in part due to the launch of a $180 million liquidity mining program that included popular DeFi dapps like Curve and Kyber, but also, Avalanche’s own Trader Joe. In August, Avalanche’s TVL surpassed $2 billion and has grown ever since. Avalanche competes with Terra and Solana for the third spot in DeFi rankings behind BSC.

The presence of scaling solutions in the DeFi space is becoming more visible. Polygon, Ronin, Arbitrum, and other blockchain alternatives are home now to attractive DeFi options that expose users to Ethereum secured assets without incurring high transaction fees. This trend also shows that Ethereum will eventually become a network of whales as the gas fees justify operations above certain thresholds. 

The case of Ronin is worth revisiting. Going forward, Ronin should not be viewed as the sidechain where Axie Infinity runs. By unleashing Katana DEX, Ronin became one of the most exciting networks in the industry. Especially considering the potential that Ronin’s mobile wallet can offer. Katana holds over $1.25 billion in TVL and may challenge Polygon in the next year. 

Despite living under the 2021 shadows of both NFTs and games, the DeFi sphere improved considerably into a more mature and very competitive, and complete ecosystem. Nevertheless, there is still room to improve, especially regarding security.

Industry Challenges

Despite the impressive performance across blockchain main categories, the dapp industry still faces several challenges that need to be addressed in its current estate. 

Security

Thanks to its cryptographic encryption mechanism, and its decentralized infrastructure, blockchain possesses one of the most secure technology frameworks ever. Nonetheless, flaws in the code of smart contracts, wrongful actors or, simply bad security practices, may lead to undesirable results with negative outcomes.

According to the Rekt database, over $1.9 billion have been lost in 161 attacks during 2021. To put into perspective, a total of $575 million were stolen in the previous five years combined. The value is attracting wrongful practices and there is a need to mitigate this scenario. 

These events include smart contract exploits, flash loans hacks, and exit scams or “rug pulls”. Perhaps the most famous one happened in August when a hacker stole $600 million after exploiting an Ethereum DeFi dapp called Poly Network in what was the biggest cryptocurrency theft in history. Although the funds were returned by the attacker in a strange turn of events, the message is clear. There is a need to embed cybersecurity leading practices into the industry, especially in the DeFi space, where the vulnerabilities are riskier, and it is where most of the value is concentrated. 

While these hacks and exploits make the headlines, blockchain users have lost valuable assets and should be aware of common security good practices. Securing your tokens with a hardware wallet, doing your own research before investing, avoiding clicking suspicious links, or sharing a private key with others are some examples of good security practices that are easy to achieve.

Regulations

The increased number of security issues including breaches and frauds signal a glaring need for increased regulatory activity. Not only to protect blockchain users but to increase the trust level within the industry. 

Probably overlooked initially, the rapid path towards adoption has made regulatory matters a priority worldwide. Such is the case with the SEC in the USA, The European Commission in the EU, and local authorities from other Asian and American economies. 

In 2021 the SEC failed to address properly the need to regulate the industry. The US authority has been cautious and strict in regards to crypto and has denied the creation of crypto-based ETFs historically. The geographical restrictions to US citizens are something to monitor as they have been deprived of participating in regular activities such as airdrops or even being part of play-to-earn. It seems that the next wave of digitally-led finance will develop outside of the US.

Legal status of cryptocurrencies around the world; source: World Economic Forum

In Europe, the regulatory narrative around the industry has been more tangible. Perhaps boosted by the conceptualization of a potential digital Euro. The European Central Bank (ECB) and the European Commission have been involved in discussions about the topic. Furthermore, The European Blockchain Partnership, in cooperation with the European Commission is expected to launch a pan-European regulatory sandbox at some point in 2022. Clearly, the Eurozone is miles ahead of a restrictive US market. 

Meanwhile, in Asia, the situation is more restrictive. China has banned Bitcoin mining several times and 2021 was not the exception. All crypto-related activities are considered illegal in that country, perhaps clearing the way for a digital Yuan. In India, the approach is restrictive as well. Nonetheless, Indian authorities and policymakers are reportedly making progress towards regulating this type of asset. 

On the other hand, the Southeast Asia region has made some progress already when it comes to crypto regulations. Singapore is a country that embraces cryptocurrencies and has a framework in place. The Monetary Authority of Singapore has adjusted the Payment Service Act (PSA) to reduce financial risks associated with these types of assets. The Philippines, another country with strong relations with the industry, has already implemented guidelines to manage digital assets. 

Regardless of the geography, the regulations are especially important in DeFi, a space that mirrors the traditional finance industry to some extent. Plus, DeFi is where most of the industry’s value is locked. One particular topic that has raised the attention of regulatory entities is stablecoins, assets that are pegged one-to-one to the USD or any other stable asset. Their use within DeFi is wide and has been increasing lately too. Regulators are concerned about whether the liquid reserves that stablecoin firms like Tether, USD Circle, Pax, etc. are enough to warrant the increasing supply of these assets. A digital bank run is a possibility, and the collateral effects of that scenario would be detrimental to all the progress achieved by the industry. 

All in all, regulations will certainly help the industry in the long term. The initial stage will probably not be a smooth road. There is a wide gap between a regulated environment and the current ecosystem as several dapps, organizations and their underlying tokens are not precisely following the best practices. Nonetheless, it is important to commence building an agreed regulated environment. This scenario will bring a sense of trust into the industry, as institutions and regular users will be more confident whilst using any type of dapp that complies with a proposed regulatory framework.

Intellectual Property

Blockchain technology offers a vast array of applications in the IP context. Tracing the provenance of an item, to authenticate an individual, and of course, manage registrations and licenses. Yet, IP presupposes some challenges to the industry itself.

One of the premises of Web 3.0 is availability. Several decentralized applications have made their code available to the community. In this way, people around a project can continue building looking to enhance their product. However, it is not uncommon to see projects copying established dapps and raising millions thanks to the work developed by others. In blockchain there is a thin line between copies and forks, still, there needs to be a clear distinction between a fork that helps the community, and a clone that simply changes a logo and launches a product labeled as their own creation.

A popular case happened when Sushiswap forked Uniswap V1 contracts and executed a vampire attack draining millions in liquidity. As of now, Uniswap V3 contracts are licensed, protecting them against intellectual theft. Something similar happened with Aave. In the latest governance vote, Aave token holders decided to license the upcoming lending contracts of Aave V3, restricting for an undetermined period of time the underlying code.

Aave V3 contracts governance voting results; source: Twitter

While licensing goes against the open-source ethos of blockchain and DeFi, it certainly protects the arduous work of several developers against copycat projects. It certainly hinders the nature of the community, enhancing the industry, but at the same time, it shields all of us against poorly developed projects that in most cases, are not aware of the functionality of their stolen work. Ideally, in the upcoming months, we get to a middle ground where individuals that really want to improve a product, can be approved to keep adding value.

Retention

The industry continues to evolve, onboarding more users than ever before. Still, the leading projects must continue to address their challenges and keep considering their user base as top priorities.

NBA Top Shot experienced a surge in popularity in February. Unfortunately, the project’s platform experienced several issues due to the high demand that led to a poor UX. In the months that followed, the Dapper Labs collection experienced a slight decrease in its user base due to the issue mentioned above.

On the other hand, there is the case of Sky Mavis. Due to the popularity of Axie Infinity, players experienced issues connecting to the site due to high traffic at different times throughout the year. The Sky Mavis team responded promptly and has always been active and transparent in social media platforms Twitter and Discord. The game has not only maintained its user base, but it receives over 2.5 million DAU. Sky Mavis continuously improves the game and is an excellent example of a dapp with a reasonable retention rate.

Bad media

Individuals that are not familiar with blockchain technical capabilities are prone to misleading information about this technology. Perhaps the most mainstream statement develops around the idea that the blockchain and its underlying use cases such as NFTs and games represent a threat to the environment.

Indeed, the Proof of Work (PoW) consensus mechanism used in blockchains like Bitcoin or the first iteration of Ethereum is far from being energy efficient. Bitcoin’s annual energy consumption equals the amount of energy spent in entire countries like Chile or Switzerland. However, this consensus mechanism is being used less frequently due to its operational drawbacks like low speed and low scalability. 

Almost the entirety of the current dapp spectrum relies on other consensus mechanisms like Proof of Stake and Proof of Authority, among others that are much more efficient in energy consumption. So it’s far-fetched to say that NFTs, games, and other blockchain use cases damage the environment.

It is essential to provide as much educational information to the masses as possible. This will reduce the number of wrong assumptions that lead to a negative perception of the entire industry.

2021 In summary and the road ahead

2021 proved that the blockchain industry is one of the most exciting places to be. The rapid growth is unparalleled to any traditional industry. While, the stories about the social impact generated by blockchain dapps, like the one with Axie Infinity in The Philippines, appear to come straight out of a Hollywood script.

Thanks to the euphoria around avatars and art NFTs, the mainstream finally learned the power behind this technology. The rise in the demand for NFTs reinforced by the $22 billion trading volume is only the tip of the iceberg. The potential for these assets is massive and transcends beyond the monetary impact within the industry. 

Like NFTs, people started to realize the advantages presented by blockchain-based games. The narrative around play-to-earn and the metaverse only started, and it will probably shift the traditional paradigm to a new one where individuals can fully control their assets, and monetize their time and work in a new decentralized digital community. The existing intersection between blockchain-based games and NFTs allows gamers to truly own and manage their playable assets, but most importantly, earn cryptocurrencies by playing. It feels like the narrative around these two trends might experience a meteoric rise.

Although most of the attention was focused on NFTs and games, DeFi feels more consolidated and mature. Relevant blockchains made their footprint into the space more visible and propelled an all-time high in terms of TVL. Terra, Solana, and Avalanche have made huge strides and should be considered serious contenders of BSC and Ethereum. Whilst scaling solutions will become more demanded going forward.

Ethereum is one of the most important blockchains and will undergo an important structural change by evolving into a Proof of Stake network. Layer-2 solutions will host important DeFi and play-to-earn dapps whilst enjoying Ethereum’s security. 2022 is going to be important for this network. 

Finally, even though security, regulations, IP, and other related topics are not as attractive as the impressive figures, they will undoubtedly play a vital role in 2022. The industry should prepare to learn more about these trends as mass adoption feels closer than ever. 

Opinions That Matter

A collection of opinions and 2022 predictions from select partners, top-ranking dapps, and journalists. These opinions are those of respective organizations and not those of DappRadar.

Jeffrey Zirlin, Co-Founder & Growth Lead, Sky Mavis/Axie Infinity

From an Axie standpoint, 2021 has been an incredible year.  In the past year, Axie Infinity has evolved from a gaming concept into a rapidly growing ecosystem and a movement with an incredible, dedicated community of nearly 3M DAU. This player growth, combined with the release of our decentralized exchange (Katana) has spurred tremendous usage of our Ronin blockchain. Today, Ronin’s transaction volume has grown to roughly 4x the number of daily transactions of the Ethereum chain, and that growth has pushed us all to prepare for a significant scale in 2022. We were also able to expand the team to upgrade our capacity to work on parallel feature deployments at once. This will pay off long-term as we juggle gameplay releases, infrastructure upgrades, and inspiring 3rd party development.

Exponential growth has come with its fair share of challenges as well. This year was definitely heavily focused on infrastructure upgrades through Ronin. 2022’s big theme will be gameplay and content releases.

On the Axie Infinity side, we are constantly looking for ways to improve the game and bring better experiences to our community. Battles V2 (Axie Infinity: Origin) is our massive battle upgrade that will make Axie faster, more fun, and easier for friends and family to get started playing by providing starter Axie’s. Through this new system, people will be able to fall in love with the game before having to officially onboard onto the system. 

On the tech side, we believe in a future where all in-game resources and items are freely trade-able tokens and continue to take steps to make this a reality through our DEX, proprietary sidechain, and Ronin mobile wallet. In the future, The Mavis Hub, our platform that distributes games on both PCs and Macs and seamlessly connects to our proprietary Ronin Blockchain, will support game developers building and distributing blockchain-enabled games. We see Axie as just one game in a universe of games that will be built on top of our technology. A part of our vision is to harness UGC so that the community can build amazing experiences on top of Axie via an SDK.

Finally, our community base is so strong that we are beginning to funnel them into a wide variety of DeFi services. Katana is the #2 decentralized exchange, and following its success, we will begin to offer new financial products that empower our user base. For example, we plan to start issuing players’ cards directly using their in-game wallets.

I’m interested in social coordination tools that will allow Dapps to add zeroes to their player base stats in a way that scientifically fosters hyper-engagement. 

ApeSwap Team 

In 2021, we experienced a year of unparalleled growth & adoption for cryptocurrencies and web3 technology. Even though there was plenty of hype to sort through, the underlying substance has forced the world to take crypto seriously. From institutions adding Bitcoin to their balance sheets to NFTs entering the mainstream to dozens of new EVM-compatible chains entering the scene to DAOs galore – 2021 has been a fun and wild ride. 2021 will always be near & dear to ApeSwap’s heart as the year we came to life! We were very fortunate to capture such an amazing community from the start who truly believed in us. Nurturing our community has always been our top priority, and it’s the main reason we will never stop building.

Through all the ups and downs, we have come a very long way. We are sure we speak for all the apes when we say that the biggest and most important win we have experienced is the global community that has sprouted up to keep us going since inception. We see the 2022 crypto landscape revolving around the three S’s: sustainability, shakeouts, and sovereignty. 

Sustainability & shakeouts go hand in hand – now that some of the hype is dying down around core DeFi applications & NFT projects, it is impossible to simply fork a protocol and see success. 2022 will be about bringing sustainable tokenomic models to the table and shaking out those who cannot adapt. Additionally, sovereignty will play a role in this as regulators are undoubtedly taking notice, and regulation will directly impact sustainability and shakeouts by deciding where and how these protocols get built. In 2022, ApeSwap expects to capitalize on many of these anticipated shifts. We have our sights set on becoming a more sustainable, DAO-centric protocol, expanding our ecosystem of service offerings both horizontally and vertically.

We expect three primary verticals to take off in 2022: Metaverses, GameFi, and sustainable DAOs. With the global awakening to metaverses in 2021, it’s no surprise that we are bullish on the technology for 2022. The key here is that a true metaverse economy needs to offer digital scarcity. While mainstream actors will aim to tap into this, they will need to rely on cryptography-based service offerings to succeed.

While GameFi arguably “took off” in 2021, the games were underwhelming and mechanics often lagged behind those found in off-chain gaming. Clicking and waiting 15 seconds with little to no action is not what gamers are used to – the advances of 2022 will change this. The crux of true growth will be whether gaming studios can release quality products to lure in gamers who are loyal to solid gameplay, and not those seeking a “Play to Earn” experience.

Finally, who could forget about Decentralized Autonomous Organizations? While “DAO” has been a buzzword since 2017, we have seen some of these structures come to truly flourish in 2021. The concept of a DAO is starting to take on a whole new meaning, and initiating a DAO seems to be the only true way to maintain a protocol over the long term. It seems like more projects are waking up to this, and will expect to realize these advancements in 2022. The most interesting (and futuristic) magic starts to happen when we mix all three of these next-gen technologies together. We are very excited about 2022!

Sebastien Borget, COO and Co-founder of The Sandbox

It’s been a year to celebrate for us as The Sandbox experienced tremendous success in 2021. It’s a combination of the accelerating growth of the gaming dapps sector and our gaming metaverse at the same time. On the business side, our highlights include reaching 1,100,000 users with a connected wallet, achieving over US$216M in GMV to date, and closing our $93M Series B round that will help scale our growth as an entertainment destination where players, creators, brands, IPs, and celebrities can engage with each other through virtual experiences from games to live concerts to social. We’ve seen growing excitement from brands and IPs who want to engage with fans in our metaverse, with over 200 brand partners signed up so far to own virtual LAND in The Sandbox and create experiences and NFTs. This includes Snoop Dogg, who’s creating a Snoopverse multi-event experience that includes his mansion, a huge range of NFTs and avatars, live concerts, and more, to entertainment brands like The Walking Dead and The Smurfs, clothing brands like Adidas, and blockchain brands like Binance.

On the gaming side, we opened our Alpha to players, and it’s been exciting to see the players interacting with each other in The Sandbox. We’re getting tons of great feedback from the 20+ experiences we’re sharing right now and how play-to-earn is working across these gaming and social experiences. After years of work, we can see the ecosystem all coming together as we approach our launch in 2022.

On the downside, as more people become excited about the potential for blockchain and NFTs a vocal minority, including some in the traditional gaming industry, want to push back. I think it’s understandable to react with fear when you see change coming to an ecosystem in which you’re currently successful, so we need to continue to explain the benefits for players and creators. This is something I’m working on as President of the Blockchain Game Alliance, a non-profit organization of 290 key members of the industry. We just conducted a BGA survey, and 43% of our members say education about the core concepts underpinning blockchain gaming is the next hurdle we must overcome.

We envision that within 10 years, the metaverse will have transformed profoundly how we’re thinking about the way we’ll be working, socializing, playing, and earning through the economic opportunities and jobs it is creating. In 2022, we will see play-to-earn emerge more fully in gaming dapps. Right now, play-to-earn is becoming known as a mechanism. In 2022, it will be a reality as more games, including The Sandbox, support ways for players to be truly rewarded for their time.

Similarly, the metaverse is now established in today’s lexicon, but we’ll see it graduate from concept to reality more fully in 2022. Speaking of which, we have a lot of exciting things coming up in The Sandbox in 2022, including the official launch of our metaverse in the first half of the year. This will include players being able to create their own experiences on LAND they own, the emergence of player governance with DAO launch with staking and voting mechanisms for SAND, LAND, and AVATAR holders, our first virtual concerts from Snoop Dogg and other artists, and the launch of partner experiences. We also hope to expand beyond PC to mobile platforms, which will open up tremendous growth potential in Asia and other regions where mobile is really strong.

In 2022, I believe NFTs will have gone beyond and transformed Culture, Media, Art, Music, Gaming, Food, and the Metaverse as a whole. Gaming is what I really have my eye on. We have companies like The Sandbox who have been preparing for this moment for years as we’ve collectively built out our ecosystems, tools, technologies, etc. We have late entrants like the major gaming publishers who now see the opportunity and are trying to jumpstart their plans. And we have tremendous interest from both players and investors for gaming metaverses to become a (virtual) reality.

I expect there will be important announcements and bold visions expressed – but more importantly, there will be a range of gaming dapps coming online to engage players, with more people discovering the benefits of play-to-earn.

Art Malkov, Head of Growth, IoTeX Blockchain 

2021 has been a year of opportunity and unlocking potential. Reflecting on how far we’ve come since the start of the year shows the amount of growth this entire space has seen. At IoTeX, we have reached many milestones in project development that are a testament to this global community that is realizing the possibilities of blockchain. 2021 was a time for new players in the game to climb the charts and introduce their own innovative ideas that have never been deemed as possible before. Hearing blockchain, Dapps, and NFTs being talked about in such a mainstream context proved people’s curiosity and energy for the space. At IoTeX, we spent this year focusing on how to bring this vision to reality within our ecosystem and beyond. 

2022 will be a time for projects to really work together in partnerships and collaborations in order to bring the most innovation and enhanced functionality to each network. Now that Web3 is gaining more attention in the mainstream, the focus will shift towards how we make Dapps accessible, user-friendly, and engaging for the general public who may not fully understand blockchain yet. At IoTeX, we are planning on hundreds of Dapps launching next year. This means giving users the best experience possible by providing them with an entire ecosystem of DeFi, GameFi, DEXs, and more to show people the hope for what is possible for the upcoming year.

One of the most exciting Dapp categories is play-to-earn gaming. Not only does it show the fun, exciting side of this space, but it helps people simply understand how they can start earning real rewards and what Web3 is all about. After the massive growth, DeFi saw in 2021, we can only imagine how much success it will have in 2022. IoTeX is most excited for the new category of MachineFi, connecting real-world devices to blockchain and allowing users to own and monetize from them. This is only the beginning for more Dapp categories to emerge, and 2022 will be an impactful year for this growth.

Elaine Song, Hedera Hashgraph, HBAR Foundation 

Professionally, 2021 was about creativity. I took on a new opportunity within the Hedera ecosystem at the HBAR Foundation from my previous position at Okcoin because I wanted to dive deeper into the building and be closer to the innovation that stems from the protocol level. A lot of the cool use cases that people are engaging with are technical advancements at a cryptographic level, and that’s actually a really incredible fact. This is less of a win or a loss, but the regulatory interest in crypto was exciting. I take it as a sign of maturation – the fact that regulators are scrutinizing more means that what we’re doing is working. And more importantly, the community is coming into its own on how to manage and respond in a way that is in line with the core beliefs of crypto. 

Of course the Metaverse! But also that crypto is going to become more mainstream, in a boring way. There are so many things we do in our day-to-day that can be made better with crypto – and we’re getting to a point where that’s now possible. Hedera and HBAR will be at the forefront of this. For us, 2022 will be about taking the enterprise strength of HBAR and bringing it to crypto-native users and use cases. 

Increased segmentation of the metaverse. Just like how DeFi encompasses every and most crypto activity now, the metaverse will grow and specialize at the same time. This will allow for innovation in both breadth and depth, which I think will be a really important exercise to fleshing out this new era of technology and human interaction.

Raindy Lu, Head of Marketing & Communications, Ontology 

2021 is the most exciting year for crypto to me, we’ve witnessed the bump in the market, as well as more and more serious discussion on the regulation side. The blooming of the NFT sector can be considered as the main ‘Win’. Through NFTs, art creators can actually own the copyright of their masterpieces, to avoid the masquerading issue. This advancement could only be realized with blockchain technology. The obvious ‘loss’ is that people only concentrate on how to make money from the NFTs, but not the real value of the art. The motivation for NFT creators is profit-driven, to be honest.

I think the fundamental infrastructure for Web3 would be the trend for 2022, especially Decentralized Identity (DID). The metaverse is a convergence of the physical and digital worlds, but how to recognize yourself in different dapps, and how to manage them could be a big problem. There should be a united DID for everyone, which binds with your crypto wallet address, to allow access for NFTs, verifiable credentials (VCs), and all crypto-native info. It can even be KYCed for necessary scenarios. More importantly, is that the DID should be self-sovereign. Based on DID, more applications using on-chain reputation can be further expanded.

Ontology plays a significant role as a Web3 infrastructure contributor. We have spent years polishing the products and technologies and now we are launching the Ontology EVM Fund to expand beyond our current borders. With ONTO Wallet, Wing Finance, and OScore, Ontology has already demonstrated a real application for Web3 with a certain amount of real users. We are sure that more achievements can be expected in 2022.

I think as users become more sophisticated, the dapps with a lack of security and decentralization will have an ever-decreasing user base, especially for DeFi related dapps. Gaming is Definitely going to be hot in 2022, as they’ve already gained great attention from individual and institutional investors. Considering the aim to build a decentralized metaverse, I do think it will be a genesis year for Web3 dApps. For instance DID, reputation, DAO, and metadata dapps. These are the basic tools to attract a wider range of people to join this amazing world.

Sarojini McKenna, CEO, Alien Worlds 

2021 has really been the year of the rise of blockchain gaming and we are so excited to see where it goes. Enormous wins for both Alien Worlds and also blockchain gaming and play-to-earn games, in general, have been increasing interest and adoption, as well as unprecedented growth. When Alien Worlds began its journey into this space just over a year ago, even the idea of an NFT was not familiar to many. Now we’re seeing skits about them on SNL (Saturday Night Live), Paris Hilton schooling Jimmy Fallon on NFTs plus Christie’s and Sotheby’s featuring NFTs at their auction houses! People are seeing the possibilities of NFTs with utility serving various functions and adding value to players and communities. We’re honored to be a project that showcased this technology early on, leveraging NFTs as game pieces with utility and functionality in Alien Worlds. 

The possibilities of Alien Worlds in the metaverse are also very exciting and inspiring. With a really strong foundation, we can see huge opportunities in regard to community growth and new participants engaging with Alien Worlds mining activity on WAX and Missions on BSC. It is a major win for us to see communities sprouting up around NFT activities like this, creating games of their own with their own culture and incentives around engagement using the tools and mechanics we’ve provided.

We predict bigger organizations and companies participating, taking a stake, and leveraging these truly decentralized projects. They will see the unstoppable network effects in action and will join in to be successful.

We look forward to introducing more DAO possibilities, educating on the importance of DAOs, and making DAOs accessible. Decentralization and communities are at the heart of our project. We look forward to continuing to execute our roadmap as well as creating activities and tools for our many player communities to grow and thrive in entrepreneurial ways. Our metaverse is an economic one; it is anything that Trilium (TLM) and our NFTs touch, so the possibilities for how our metaverse will grow and individuals will create and share are truly endless. DAOs, NFT+Gaming, traditional communities leveraging NFTs to benefit their communities. We expect all this to feature prominently in 2022. 

Tehn, Blockchain Cuties, Community Manager

As a long-running project, 2021 has been a huge year for NFT’s. And that means it’s been a wild ride for us as well. It’s close to what 2017 was with ICO hype trains. It’s a year of growth, NFT’s, unrelenting hype, visualizing the metaverse, and new beginnings for many people new to the space! For us, personally, we managed to grow the in-game volume turnover through trading, new game mechanics, and many other crucial aspects of the game. As a team, we had a fairly difficult year. We underwent restructuration, and while it took a little more time than expected, it’s been a very productive year for us. Now, the team is fast, agile, refreshed, and hungry. The team has been working hard and heavily on many technical procedures to expedite updates and speed up the development time of new features for the game. 

In 2021, the NFT space went through a super consolidation phase, and due to that fact, the blockchain space has seen meteoric growth. Now the blockchain industry is much more mainstream. Thanks to all of that attention, it will be growing faster and become something less confusing for the average user. Many aspects of blockchain trends like GameFi, Metaverse, financial primitives, user Identities, and many more are set up to steadily grow for the foreseeable future. With all this hype, many new projects came into the fold, but only time will tell who will be still here in the years to come. 

As a project, we are working towards a unique tokenomics scheme, where it’s based on the token that we launched this year. We are continuously expanding the number of blockchains supported by our game. The team is constantly working on the in-game economy to provide the best value for the player’s time and activity.  Early in 2022, we are planning to launch the Closed Alpha stage for War of Cutieland expansion. For sure those will be L1 solutions and multi-blockchain L2 solutions. These will allow users to make their assets liquid, and transferable between different blockchains using bridges. For GameFi, major companies are looking into the space now, which is both good and not great, in a way. Big and experienced game development companies have a lot of the groundwork covered, like production procedures, and strategies. These new players in the new, growing industry will help provide significantly more polished products for the end-users. 

On the other hand, smaller budget gems will have a more difficult time getting through to their potential communities and become the next hot thing due to a rougher look and feel. So the starting product bar will become so much higher. With all that in mind, the marketing side of things will become something more robust. More and more marketing companies will have a much more firm understanding of how this space works. This experience will help provide more value to developers, gamers, and NFT enthusiasts alike.

Robert Miller, Communications & PR, Fuse Blockchain

2021 has been all about partnerships and genuine interoperability. 2017 was a lot of hypothetical partnerships. But now, with genuine everyday adoption of wild and wonderful new products, it’s all about moving as quickly as possible to integrate technologies and create a strong infrastructure for growth. We feel we have executed pretty well on this. People are often very shocked to see where Fuse ranks compared to other projects on platforms like Coingecko. It’s lower than you’d expect seeing all the technology and products in our ecosystem. We’ll improve how ecosystem strength is communicated moving forward to ensure are aware of the opportunity to build with us. 

We’ll see bridging technology improve generally as people realize more and more that multichain is the way forward. Also, lot’s more business applications in payments as the b2b sector realizes the enormously low-hanging fruit to avoid paying ridiculous transaction b2b bank fees. The KYC/AML overheard is lower as well because fewer identities to manage but a large volume. Projects like Request Network (invoicing) which is deployed on Fuse will continue to do well. Infrastructure plays such as The Graph and Pocket Network will continue to spread across the blockchain ecosystem providing frameworks that make it easier for developers to deploy dapps whilst ensuring decentralization. The future is looking clearer than ever – a lot of real businesses now with clear roadmaps and objectives moving forward. Fuse will see accelerated growth in its DeFi ecosystem with the arrival of the VOLT governance token for FuseFi as well as improved services for business from Q2 onwards thanks to big improvements on the Studio (b2b product suite).

I personally spent November staying in an awesome youth hostel in Lisbon where I got to meet lots of non-crypto young people in their mid-20s to early 30s. People are worried that they are missing out on a big opportunity but they’re just not geeky enough to fall down the rabbit hole and start using Metamask and complicated exchanges etc. We’re getting past the innovator adoption phase. 2022 will be the year of early majority adoption of DeFi. Lot’s more easy-to-use products like Fuse Cash and Dharma which allow people to access high yield and exotic assets in a simple interface with non-custodial, friendly wallets. NFTs will also continue to play an important role in this vital stage of the adoption cycle.

Jay Kurahashi-Sofue – Vice President of Marketing at Ava Labs (Avalanche Blockchain) 

2021 was about new beginnings. Brand new Web3 projects emerged out of stealth creating new disintermediated services: bonding, play-to-earn gaming, NFTs as membership tokens. The biggest win for me is the continual improvement of my Web3 knowledge base. The longer the time spent actively participating in Web3, the better you get at spotting new opportunities. Losses would be some of the unfortunate mistakes made along the way.

In 2022, UX for Web3 user infrastructures like wallets, fiat on-ramps, and app directories will improve significantly. Users will begin to experience Web3 without interacting with technical functions. These apps that strive for seamless user experiences will begin to take the lead.

I’m most excited about NFTs beyond digital collectibles–specifically, NFTs that are tied to utility. Membership tokens, property records, in-game pieces are some of the early categories building on NFTs. DeFi will also accelerate once new deployments begin to prioritize scalable blockchains within their launch strategies. 

John Wu, President of Ava Labs (Avalanche Blockchain) 

In 2020 we experienced the first real DeFi boom, and in 2021 the DeFi community proved it is here to stay and build for the future by embracing multiple chains. It will also be remembered for NFTs breaking into the mainstream faster than any other use case in blockchains or crypto to date.”

In 2022 we’ll see more growth from the GameFi segment, as play-to-earn games evolve to not only be lucrative, but genuinely fun games that users love to play. I also believe there’s an opportunity for decentralized social media to finally start making a significant impact. It’s been a long-promised use case for public blockchains, but users have not found a compelling application with a strong value proposition. That could change in 2022 as skepticism around centralized social media giants grows and people desire more control over their data. If a social media dapp takes off, it could be a massive onboarding engine for blockchains.

On Avalanche specifically, I expect continued growth along this rapid trajectory with both homegrown applications flourishing, Ethereum applications expanding to the network, and more enterprises and institutions embracing the technology. 

It’s a bit of a cop-out, but I expect everything to grow. Regardless of market conditions, the amount of talent and capital accrued by the blockchain community surpasses any sector I’ve seen in over 20 years as a technology investor and venture capitalist. From developers to business development to marketing to community, everyone in this space has the bold, entrepreneurial attitude required to make big, lasting changes with technology.”

George Tsagkarakis, Founder and CEO, egamers.io 

2021 was an important year for the blockchain gaming industry as NFTs and metaverses received mainstream attention. After years of innovation and building, the space has matured a lot in contrast to 2020, which makes it more convenient for companies to join and build.

2022 will be an exceptional year not only for gaming but the whole Blockchain industry. With institutional investments flowing into the industry, we will see phenomenal growth across all fields. More jobs will be created, more people will understand the technology and embrace decentralization. When it comes to egamers.io, we plan to expand our services and become a Blockchain gaming portal that will offer all the necessary information gamers and investors need.

Definitely, 2022 will be, again, the year of play to earn and of course, decentralized finance. With the inflation rate caused by the coronavirus outbreak, a huge number of consumers are worried and have realized they are losing money by holding FIAT in banks. The decentralized era is upon us, a journey worth experiencing.

Rhys Skellern, Communications Manager, ECOMI/VeVe 

2021 has undoubtedly been the year of the NFT. For VeVe, this has meant bridging the gap between mainstream fans and collectors, and the new world of digital collecting, and we have grown to become the leading mobile-first digital collectible platform. In doing so, we have truly found that fans attach the same value/emotions to digital assets as they do to physical items (and in many cases more so), and in 2021 alone we have announced and released content from more than 60 brands and artists, from the likes of Disney, Marvel, Star Wars, Cartoon Network, Universal Studios, Mondo, Givenchy, DreamWorks, DC Comics and more. 

These multi-year partnerships and announcements have helped to validate the NFT industry at large, and the cross-promotion, interactivity, and virality of our content have rapidly accelerated the growth of the VeVe user base. In less than 12 months of the product being available to the public, we have welcomed more than 1 million active monthly users, sold more than 3 million digital collectible NFTs, and become the top-grossing entertainment app in app stores around the world. 

However, none of this growth would have been possible without a real focus on community. There is truly no stronger force than the people who understand and appreciate your vision and actively work to help you build it. Not only has this engagement with, and in, the community formed true friendships across the world, but it has also become an invaluable resource for feedback, helping us to shape a product suited to our customers while continuing to foster a welcoming and inviting space for content creators, community builders, and fans. Regardless of market conditions, 2022 will be a year of building. Aside from the tech, I would expect all projects to place much more focus on community building and engagement. This pillar of the modern-day business is crucial to early product adoption and testing, but it can also create and foster a diversified audience, protect nascent ecosystems from external issues, and becomes an asset in and of itself. 

Personally, as the wider market structure changes, I am expecting a rotation of assets into DeFi and staking protocols, as investors look to earn yield rather than sell assets. With it I would expect a migration of tokens and users onto layer 2 Ethereum, particularly as exchanges continue to integrate and onboard directly to L2. 

When it comes to product development and merchandising, I fully expect NFTs to form a core component of digital product strategies for the world’s leading companies, as they explore merchandising, advertising, and engagement strategies within the Metaverse. For VeVe, we will be releasing the first iteration of the VeVeVerse sometime in 2022. Not only does this help to bring the same world-class IP into the digital arena, but it also creates entirely new revenue streams for IP holders in the digital space. For collectors, this evolution of our ecosystem serves to create more immersive and interactive experiences, enhance the utility of VeVe digital collectibles and the OMI token, whilst creating more opportunities to express fandoms! 

Aside from the Metaverse and the myriad of potential it brings with it, I expect to see the integration of NFTs into DeFi protocols, as the maturity of these assets also increases opportunities for improved capital efficiency, and serves as a perfect source of collateral in the digital space. 

Towards the end of 2022, I am also expecting (hoping for) the expansion of the NFT industry to begin representing physical/illiquid assets, such as real estate, and create a raft of new opportunities as we move into the next market cycle. 

In terms of building and experimentation, I am anticipating a number of bridges and protocols that facilitate interoperability between layers, chains, and scaling solutions. Whilst I would love to see this integrated directly into wallets themselves, I think the earliest iterations will continue to see the dapp itself launching on multiple chains and becoming the link. Other themes I’ll be paying attention to include DAO’s, decentralized file storage, digital identity, NFT adoption, and the impact/adoption of P2E gaming in developing nations, however, I believe we’re still a few years away from any sort of mainstream adoption of blockchain-based gaming.

Tim Copeland – Lead Editor, The Block 

It’s been a wild year of experimentation. We’ve seen projects decentralize with million-dollar airdrops, NFTs skyrocketing and becoming used as collateral for loans, there were huge hacks of experimental cross-chain protocols like Poly Network and Thorchain, plus Ethereum introduced a radical fee-burning mechanism. Crypto has been on a non-stop, chaotic path that has been layered with innovation. It’s been a lot of fun to observe and to document.

I think it’s going to be a challenging year for DeFi applications. They’ve come under a lot of scrutinies this year and are struggling to work out how to cope with increased regulatory attention. The question will be whether they try to work within the rules, or seek to sidestep them through decentralization. Another big question will be what will emerge from the sheer avalanche of funding into blockchain gaming apps and “The Metaverse.” But it may take longer than a year to see some more big success stories.

It seems that blockchain gaming will certainly grow rapidly. The question will be whether any other project can attract the same market share as Axie Infinity. But, as I said, this could take longer to evolve compared to other types of dapps because building games — and a community around them — is very time-consuming.

Anastasia Plane, Marketing Manager, Chromia

For me, one of the biggest ‘wins’ in 2021 has been the explosion in blockchain gaming. ChromaWay has been involved in this space for some time – we acquired Antler Interactive all the way back in late 2019, and have been building the Chromia blockchain platform with gaming dapps as one of our primary use cases. My Neighbor Alice and Mines of Dalarnia are two Chromia incubated projects that hit the market in 2021, and it is exciting to see the large communities already growing around them. With both games launching full versions in 2022, I think this upcoming year is going to be the best one yet!

In 2022, I feel the focus will shift from simply involving blockchain, to seamlessly integrating it. As more and more games hit the market, it won’t be enough to simply be ‘play-to-earn’. Is the game fun to play? Is the integration of NFTs and cryptocurrency intuitive? Is the in-game economy open-ended and well-balanced? To me, these are the factors that will determine which projects build a lasting user base.

While DeFi has been exploding in popularity since 2020, there is still so much room for growth. The envelope is constantly being pushed as developers come up with new ideas and as the blockchains become more scalable and interoperable.

2021 was in many ways ‘the year of the NFT’, but I think there are so many interesting use cases for NFTs that are just beginning to be implemented. Fractional ownership, club memberships, royalty and fee sharing, gaming applications, and more. In 2022, I think people will realize that NFTs are more than just ‘jpegs’ but an important technology that can transform and disrupt several industries.

Katie Butler, Chief Marketing Officer, Moonbeam 

2021 has been a year of building for 2022. On the technical side, we’ve been heads-down building the code behind Moonriver & ultimately Moonbeam.  The experience of launching Moonriver has battle-tested the team to go on and replicate that success with Moonbeam on Polkadot.  The team has been collaborating with other parachains as well as with Parity to develop as robust an EVM as possible to ensure compatibility on all fronts for developers. On the BD, marketing, and ecosystem side, we’ve been working tirelessly to grow and expand our ecosystem and community. For BD that meant finding and working with projects who ultimately want to deploy to the ecosystem and ensure on the technical front, we’ll be ready to support them. The marketing team has been ensuring that our name and message continue to expand through the crypto universe and the ecosystem front has been fostering an amazing ambassador program to help gain significant grassroots traction. 

2022 is going to be the year that multi-chain strategies become front-and-center. Moonbeam’s fully Ethereum-compatible smart contracts go live in January, which will enable the collaborations we’ve been working on since September 2020 to deploy and get access to the Polkadot ecosystem. The Moonriver ecosystem has continued to show amazing growth and grassroots projects that continue to push the network to new heights. In 2022 the power of the Polkadot ecosystem will finally be able to show how a network of interconnected blockchains will foster new applications that haven’t been possible until Polkadot & Kusama’s launches. Both Moonbeam and Moonriver will continue to expand the DeFi, gaming, and NFT ecosystems that have already sprung up and we’d anticipate that with the Web2 talent continuing to push into WEb3 you’ll see some amazing new use-cases spin up to continue to expand the crypto ecosystem and usability. 

NFTs have been in the spotlight for the second half of 2021 and I think we’ll see continued weaving of NFTs into games as well as DeFi. This will be less focused on unique pieces of digital art and more on what those pieces can enable such as higher yield in DeFi, better capabilities in games, and access to special content (think music & entertainment) I also believe that 2022 will be the years that music, film, entertainers, personalities, etc will start to have new viable sources of revenue via NFTs.

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